Here's Why We Still Need To Extend Emergency Unemployment Benefits

The November jobs report was solid today with the economy adding 203,000 jobs, the unemployment rate falling to 7.0% and the labour-force participation rate rising. But an underlying issue lurks within the report: the long-term unemployed.

There are currently 4.066 million Americans who have been out of work for 27 or more weeks. This was an increase of three thousand from October.

Starting on January 1st, nearly a third of them will lose their unemployment benefits immediately. This is when the Emergency Unemployment Compensation (EUC) program expires. The program, enacted in 2008 and extended with the fiscal cliff deal last year, allows unemployed people to receive benefits for up to 99 weeks. Congressional Democrats have made more noise in recent days about extending the benefits for an additional year, but Republicans have shown little interest in doing so.

This graph from the Center for Budget and Policy Priorities (via Brad Plumer) shows the long-term unemployment rate level for when past EUC programs ended:

The EUC program is not meant to last forever. It’s a temporary plan to help Americans who lost jobs during the recession and have had trouble finding a new one. But it also is not meant to end when the recovery is slow and the long-term unemployment rate is still elevated.

In addition, to receive benefits, unemployed Americans must prove they are continuing to search for a job. When the EUC program expires, many may give up, feeling they have no reason to continue searching. This could knock 0.25-0.50 percentage points off the unemployment rate, but for the wrong reasons. We want people finding jobs in the labour force, not exiting it altogether.

The November jobs report should be a sign to lawmakers to extend these emergency benefits for another year.